No change since last quarter. France’s public debt stabilized at 111.7% of gross domestic product (GDP) in the third quarter, INSEE indicated this Friday. Between July and September, the debt increased by 41.3 billion euros to reach 3,088.2 billion euros, detailed the National Institute of Statistics.
The increase in debt in absolute value comes mainly from the increase in State debt (+45.3 billion euros). The debt of various central administration bodies fell by 1.3 billion euros, that of local authorities by 1.1 billion euros and that of social security administrations by 1.6 billion.
The 60% of GDP rule
The European Treaty of Maastricht of 1992 set a public debt limit for States at 60% of GDP, a threshold that France exceeded at the end of 2002, never to fall below it again since. Since the Covid-19 pandemic, followed by the war in Ukraine, this rule as well as that of a public deficit below 3% of GDP have been suspended. They will be reactivated in 2024.
On Wednesday, the finance ministers of the European Union, however, agreed on a relaxation of European budgetary rules, which must guarantee the recovery of public finances without compromising investments in particular in favor of the green transition.
Target at 108.1% of GDP
In its public finance programming law setting France’s budgetary trajectory until 2027, adopted in September in Parliament thanks to article 49.3 of the Constitution, the government plans to reduce the debt to 108.1% of GDP by this deadline and the public deficit at 2.7% of GDP, compared to 4.9% forecast for this year.
The debt level for the second quarter was revised slightly downward to 111.7% compared to 111.8% previously announced.